Legal and regulatory frameworks

Regulatory frameworks are key drivers of change and innovation. This section describes the most relevant legislative actions on sustainability for ports and the maritime and transport industries. This information was updated on 2023-11-21.

Fit for 55 affecting ports

With its Climate Law, the EU has set a target of reducing greenhouse gas (GHG) emissions by at least 55% by 2030, with the goal of achieving climate neutrality by 2050. Approximately 6 to 7% of the maritime sector's CO2 emissions are generated while vessels are berthed in ports within the European Economic Area. This calls for the need of a strong focus on greening shipping, ensuring the sustainability of port services, and establishing infrastructure for alternative fuels. In parallel, key maritime and inland ports on the trans-European transport network (TEN-T) must adapt to the role of strategic multimodal nodes and clean energy hubs.

To address this, fossil fuels, particularly those used as bunker fuels in vessels, will no longer be exempt from taxation in EU ports. However, they will remain untaxed in ports outside of the EU. Beginning in 2023, taxes will be gradually introduced over a 10-year period, contingent on sufficient market uptake of alternative fuels.

Legal Requirements within the EU

The EU is actively working towards decarbonizing the maritime industry, and Onshore Power Supply (OPS) plays a crucial role in achieving this goal. Legal requirements within the EU vary based on the specific regulations of each member state. However, several common directives and guidelines have been established to encourage the adoption of OPS:

Directive 2014/94/EU: Sets out the framework for the deployment of alternative fuels infrastructure, including OPS. It encourages EU member states to develop national policy frameworks and infrastructure for OPS, considering the needs of vessels and ports.
Clean Ports Regulation: Some member states, such as Germany and Sweden, have implemented their own regulations specific to OPS. For example, the German Clean Ports Regulation requires ports to provide OPS for specific vessel categories while at berth.
Emission Control Areas (ECAs): Within designated ECAs, such as the Baltic Sea and North Sea, stricter regulations are in place to reduce air emissions from vessels. OPS is often required for ships operating within these areas to meet the emission standards set by the International Maritime Organization (IMO).

CO2 Emission Reduction Estimates

The estimated reduction of CO2 emissions when vessels connect to OPS while in berth varies based on factors such as the vessel's size, power requirements, and duration of stay. However, studies indicates that OPS can lead to significant emission reductions.

According to the European Commission, OPS has the potential to decrease CO2 emissions by up to 13 million tons annually in the EU, equivalent to removing approximately 2.6 million cars from the road each year. The actual emission reduction achieved depends on the extent of OPS adoption and the energy sources used for electricity generation at ports.

In conclusion, OPS stands out as a pivotal solution for mitigating air pollution and greenhouse gas emissions from vessels in port areas. Within the EU, legal requirements and regulations are in place to incentivize the implementation of OPS. A diverse array of solutions and techniques is available on the market, ranging from shore connection boxes to renewable energy integration. By embracing OPS, vessels can significantly contribute to reduction of CO2 emissions and advance the transition to a more sustainable maritime industry.

Euro 7

The Euro-norms have been instrumental for decades in improving air quality and driving technological advancements in Europe. However, as we transition to zero-emission vehicles, there is a need to shift our focus from traditional combustion engines to green platforms.

Electrified zero-emission vehicles offer a revolutionary solution, eliminating CO2 emissions and ensuring minimal levels of particulates, nitrogen oxides, and noise, particularly beneficial in urban areas. Investing in re-allocating large industrial resources from revolutionary zero emission technology into traditional combustion engine technologies, especially to meet challenging EURO 7 targets, is counterproductive to the ongoing system transition and fails to contribute significantly to air quality improvement.

Currently, eight years after Euro 6 was enforced, almost 80% of Heavy-Duty Vehicles (HDV) on European roads are pre-Euro6. highlighting the importance of renewing the fleet to Euro 6 for more efficient pollution reduction.

CO2 performance regulation for heavy-duty vehicles

Since 2019, there has been an EU CO2 performance regulation for heavy-duty trucks, mandating truck manufacturers to disclose the CO2 performance of each produced vehicle. The initial regulation required a 15% reduction in CO2 emissions by 2025 (base year 2019) and a 30% reduction by 2030, covering over 70% of the truck market. Heavy fines would be imposed on manufacturers failing to meet these targets.

The regulation is now proposed to be updated to intensify the 2030 target to 45% and introduce new targets for 2035 (65%) and 2040 (90%). This update will extend to more vehicle groups, including medium-duty and heavier trucks, and buses with an ambitious -45% reduction requirement within 5 years. Achieving targets above 10-15% requires a substantial percentage of zero-emission trucks in the market, demanding manufacturers, and transport companies to actively transition.

For instance, to attain a 45% CO2 reduction by 2030, around 35% of the vehicle share must be Zero Emission Vehicles. Volvo Group, with serial production in place, and a large number of eager customers willing to start their transition, emphasizes that meeting these goals not only relies on vehicle technology availability but also necessitates enabling conditions must be in place to make zero-emission vehicles the preferred choice for customers.

AFIR - Alternative Fuels Infrastructure Regulation

The regulation should be viewed as an initial step toward the introduction of battery electric and hydrogen-fueled zero-emission trucks and buses.

There is a direct correlation between the availability of charging and hydrogen refueling stations and the number of zero-emission vehicles that can be operational on the roads. The absence of this new infrastructure will significantly impede and hinder the possibility of meeting future CO2 emission targets. The recently established Alternative Fuels Infrastructure Regulation (AFIR) can only address approximately 20% of the required ZEV fleet to achieve a 45% CO2 reduction, which is insufficient. To ensure a transition to the -45% CO2 level proposed by DG-CLIMA, it will necessitate over 50,000 publicly accessible chargers and around 700 hydrogen refueling stations.

TEN-T

The Commission propose a revised regulation in December 2021, with the goal of enhancing the safety, sustainability, speed, and convenience of the EU's transport network. For instance, all major cities are expected to create sustainable urban action plans to encourage zero-emission mobility. The 'AFIR' utilizes the Trans-European Transport Network (TEN-T) to specify the locations and specifications for constructing charging and refueling stations. Consequently, a robust TEN-T network across Europe, coupled with ambitious commitments from Member States, is crucial to surpass the minimum level of charging stations stipulated by AFIR for ensuring the transition of the transport sector.

ETS - European Emissions Trading System

The European Emissions Trading System (ETS) stands as a cornerstone in the European Union's strategy to combat climate change and reduce greenhouse gas emissions. Established in 2005, the ETS operates as the world's first and largest cap-and-trade system, creating a market for carbon allowances and fostering a sustainable approach to industrial emissions. This innovative mechanism sets a cap on the total amount of greenhouse gases that participating industries can emit, while allowing companies to trade emission allowances, thus incentivizing emissions reduction. As the EU continually refines its climate policies, the ETS plays a pivotal role in steering industries toward a low-carbon future, aligning with broader objectives of environmental sustainability and climate neutrality.

ETS related to maritime transport

Maritime transport is a vital component of the EU economy, recognized for being one of the most energy-efficient modes of transport. However, it also constitutes a substantial and expanding contributor to greenhouse gas emissions. In 2018, global shipping emissions accounted for 1,076 million tonnes of CO2, constituting approximately 2.9% of human-caused global emissions. Starting in January 2024, the EU's Emissions Trading System (EU ETS) will be expanded to encompass CO2 emissions from all large ships (5000 gross tonnage and above) entering EU ports, irrespective of their flag.

The system includes:

50% of emissions from voyages originating or concluding outside the EU, allowing the third country to determine appropriate actions for the remaining emissions.
100% of emissions occurring between two EU ports and when ships are within EU ports.

The EU ETS covers CO2 (carbon dioxide), CH4 (methane), and N2O (nitrous oxide) emissions, with the latter two included starting from 2026. In practice, shipping companies are required to purchase and utilize EU ETS emission allowances for each tonnes of reported CO2 (or CO2 equivalent) emissions within the EU ETS system's scope. Administering authorities of EU Member States are responsible for ensuring compliance, applying rules similar to those in other ETS sectors.

To facilitate a gradual transition, shipping companies only need to surrender allowances for a portion of their emissions during an initial phase-in period:

2025: 40% of their emissions reported in 2024.
2026: 70% of their emissions reported in 2025.
2027 onwards: 100% of their reported emissions.

Source: https://climate.ec.europa.eu/

ETS for road transport

The ETS II will be launched in 2027 or 2028 and cover emissions upstream, thus regulating fuel suppliers rather than end-customers. It will put an absolute cap on emissions, which will decrease in line with a linear reduction factor of about 5%. The ETS II is a really important element for the transition of the European road transport sector. Revenues from ETS II should preferably be re-invested in the road sector to facilitate the net-zero emissions transition and mitigate negative impacts.

However, the estimated 45 EUR/ton CO2 is approximately equal to 0.12 EUR/liter diesel. This is not sufficient to drive change of customers purchasing behavior.

Euro vignette directive

The Euro vignette directive addresses road fees for the use of road infrastructure, aiming to promote the adoption of vehicles with low CO2 emissions through differentiated road fees. The updated Euro vignette directive from 2022 stipulates a mandatory but gradual implementation of distance-based fees, according to the 'polluter pays' principle. Combining distance-based road fees with CO2 emission differentiation serves as a powerful incentive to encourage zero-emission transportation. To maximize effectiveness, this approach should ideally be implemented across all Member States, aligning with the CO2 regulation for heavy-duty vehicles and serving as a significant enabling condition.

Zero emission zones

Numerous EU cities have implemented vehicle access regulations, such as environmental zones, primarily aimed at enhancing air quality and reducing noise. The authority to establish access regulations currently rests with national and local governments. Some cities and regions are evolving these regulations into comprehensive "Zero-emission zones," encompassing CO2 emissions, with the broader goal of achieving climate neutrality for the city or region.

"Zero-emission zones" prove to be an effective strategy for transitioning to zero-emission road freight transportation, generating demand from end consumers. These zones establish a clear and predictable market for zero-emission vehicles, contributing to sustainability in various aspects, including climate change, air quality improvement, and noise reduction. When multiple cities in a region adopt "Zero-emission zones," it not only shapes demand for zero-emission vehicles within the zones but also influences regional and long-haul transportation systems.

A recent example is Stockholm City, which plans to enforce Environmental Zone class 3 by 2025 in its central area, covering around 20 blocks. But have also been enforced in Oslo, London, Paris. This class prohibits diesel and petrol vehicles, permitting only light and heavy electric, fuel cell, gas, and hybrids meeting Euro 6 emission standards.

The Renewable Energy Directive

In March 2023, the European Parliament and the Council reached a provisional agreement to elevate the EU's mandatory renewable target for 2030 to a minimum of 42.5%, marking an increase from the current 32%. Specifically for the transport sector, a binding target of at least a 29% share of renewables in the final energy consumption by 2030 was established.

However, the evolution of standards and targets should continue to progress. Achieving genuine zero-emission road freight transport requires:

Ensuring that all fuels and energy utilized in the transportation sector are carbon neutral.
Recognizing that 2030 is not the endpoint; the Renewable Energy Directive (RED) should include a 2040 ambition and a corresponding plan for achieving it.